Comments on S.171 – January 12, 2022

Chairwoman White and members of the Senate Government Operations Committee, thank you for inviting me to testify on the importance of a code of ethics for the State of Vermont. As you well know, this is an issue Campaign for Vermont has followed and advocated on behalf of for a number of years.

Our first legislative update of the year always feels a bit special. This year it is extra special for two important reasons: first, the Governor focused the majority of his 2022 State of the State address on workforce development - a key priority for us that really helps to set the tone for the remainder of the year. Second, the legislature has launched right into discussions on key bills that we are engaged on, including housing, student weighting, pension reform, and yes even workforce development.

The 2022 legislative season is in full swing. As the legislature transitions back to in-person meetings and start to advance larger policy issues, we launched our annual survey to gather Vermonter's thoughts on what our priorities should be.

In order to further our goal of advocating for issues that boost working class Vermonters, we surveyed Campaign for Vermont followers about what issues impact their daily lives to most, what is most likely to improve the social and financial situation of a family, and what issues people would most like to see the legislature tackle. Here are the results!

Friends, we have been busy here at the Campaign!

We published one of our most significant reports of the year last month, which found that Vermont state employees and teachers are often in the top 25% of income earners in the state.

The State Colleges Transformation Committee launched a student advisory council in September because they feel that student input is essential to how they provide academic programs, student services, advising, athletics, residence life etc. The transformation team will also begin exploring different ways to design new programs, etc.

TO:                   THE PENSION BENEFITS TASK FORCE
FROM:             PATRICIA MCDONALD – PRESIDENT, CAMPAIGN FOR VERMONT PROSPERITY
DATE:              DECEMBER 6, 2021
RE:                   FOLLOW UP FROM TESTIMONY ON DECEMBER 1, 2021

Dear Members of Pension Benefits Task Force:

First, I want to thank you for giving Ben Kinsley and me the opportunity to present the findings of our report entitled “The Public Sector Reality.” The purpose of this report was to examine the overall competitiveness of our public and private employee wages. We believe this question does have an impact on how we should address the pension crisis because it gets at what level of benefits we should be offering to new hires. We cannot meaningfully change the promises we have already made to fully vested employees (nor should we), but we can make adjustments for new employees as a large portion of our workforce potentially turns over within the next several years.

It turns out that some government officials have known for a while that state government salaries are competitive. This letter (dated October 29, 2009) from Jeff Carr to Governor James Douglas about a review of a VSEA memo to Donna Sweaney, Chair of Government Accountability Committee. Carr’s letter, over a decade old now, points to many of the same factors we found in our recent report around compensation levels and the growth rate of state employee compensation compared to the private sector.

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At the 8/17/2021 task force meeting, Chris Rupe (part of the Joint Fiscal Office) submitted a document entitled: impact of various possible changes to plan design. The task force reported that there are various scenarios that are being considered, to include:

• Adjusting employee contributions to the pension plans
• COLA (cost of living) adjustments for active employees, for all except those within 5-10 years of retirement
• New one-time or ongoing revenue sources. None yet been selected, but under consideration are:
  • Cannabis tax revenue
  • Sports gambling
  • High-income tax surcharges
  • Elimination of capital gains income tax exclusion

Wow, it has been a year, hasn't it?

Between major federal costly government initiatives, the delta wave, workforce shortages, historic inflation, and supply chain nightmares I think it is safe to say we are all exhausted. And that was just the last six months. It almost seems like 2020 never ended, it just continued right on through 2021 and will end... who knows?

At the state level we are not immune to the national headwinds, we feel all of those developments here as well. In fact, we have a few of our own to add to the list: our waterways continue to degrade while our attempts to eliminate point-source pollution fail to find meaningful success, we have spent another year debating pension reform after the deficit in our pension obligations grew by $1B in 2020, affordable housing is impossible to find, emergency measures to connect rural Vermonters to broadband internet have ended long ago but the need is still painfully apparent, and our state college system is still in financial crisis and needs transformation into a vibrant educational ecosystem.